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(Alliance News) - PageGroup PLC on Thursday said its operations took a hit from coronavirus lockdown, with gross profit falling by almost a third over the past six months.
The Weybridge, England-headquartered recruitment company said its total gross profit in the first half of 2020 declined by 31% to GBP300.6 million from GBP433.5 million reported a year earlier, including the second-quarter gross profit falling by 47% to GBP118.3 million from GBP224.7 million.
The FTSE 250-listed company said it has a strong balance sheet, with net cash of GBP156 million at the end of the quarter. This is up from GBP83 million at the end of the first quarter, due primarily to the partial unwind of our temporary debtor receivable and a strong focus on cash collection.
Debtor days remain at pre-Covid levels, the company said, and it is not currently experiencing increased levels of bad debt.
PageGroup said it sought to reduce its cost base in the second quarter by around 20% to 25% compared to March.
Following the fall in headcount of 132 in the first quarter, it fell a further 255 in April, and then a further 326 in May and June combined. The company said its fee earner headcount fell by 531 in the second quarter, mainly in the UK and the Americas.
Going forward, PageGroup said, during the second quarter, activity levels started to pick up in several of its markets.
To enable the company to continue to drive this activity into gross profit, it said it reinstated all of its staff back to full pay from the start of July. Compared to March, PageGroup said it expects this to reduce the saving in its cost base to 10% in the third quarter from 21% in the second quarter, to drive future gross profit.
"We know the future remains unpredictable, but we believe now is the right time to start reinvesting in our flexible and highly diversified business model. Having weathered a particularly challenging second quarter, we now look forward to driving improved activity and gross profit through the second half," said Chief Executive Steve Ingham.
"We are clear leaders in many of our markets, with a highly experienced senior management team, which, we believe, positions us well to take advantage of all opportunities as and when they arise," added Ingham.
PageGroup shares were trading 0.9% higher in London on Thursday at 382.80 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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